Saudi-based Zamil Industrial Investment Company said it has signed a $55 million Murabha finance facility with The National Commercial Bank (NCB) for a district cooling project of its subsidiary Eastern District Cooling Company.

This is the first non-recourse project financing deal in the Middle East region for a district cooling project, said a statement from Zamil Industrial.

In November 2007, Zamil Industrial signed a 22-year Energy Performance contract with Saudi Basic Industries Corporation for the complete outsourcing of process and comfort cooling, including building of a central cooling plant to supply 20,000 tons of refrigeration within the premises of Saudi Iron & Steel Company (Hadeed) in Jubail Industrial City.

The SR330 million project is expected to go on stream later this year, the Zamil statement said.

NCB acted as sole mandated lead arranger for the 13-and-a-half year Murabaha facility for an amount of SR206 million ($55 million). The sponsors will bring the remaining amount as equity, it added.

The project is being developed by Energy Central Company, and advised by Gulf International Bank (GIB).

The loan agreement was recently signed in Dammam by Abdulla Al Zamil, chief executive officer of Zamil Industrial and Mansoor Durrani, head of Project Finance, NCB, in the presence of Khalil Issa, CEO of Energy Central, and other representatives from Zamil Industrial, NCB and GIB.

'We are delighted to achieve this major milestone towards the completion of this very challenging project. The strong teamwork of advisors and financiers supporting our project developer is greatly appreciated,' he added.

Durrani said, 'We are privileged to be a part of this well-structured Islamic project finance deal. We anticipate that there will be a number of similar district cooling projects to be financed with similar structures in the GCC, and are pleased that Zamil is the first Saudi entity to close such a transaction.'

Drake & Scull International, together with Zamil Industrial, are building the project. Zamil Cool Care will be the operator of the various facilities.

Baker & McKenzie Ltd. acted as Lender's legal counsel, CJR Consulting Ltd. as the borrower's counsel and FVB Energy as the Technical Consultant.-TradeArabia News Service